Stock chart patterns and technical analysis (TA) explained simply. Disclaimer: This blog and all its contents are for educational and entertainment purposes only. Do not trade or invest based on any information seen on this blog. Please read Terms of Service. VIEW IN GOOGLE CHROME BROWSER. DISABLE YOUR ADBLOCK SOFTWARE.

Monday, October 20, 2014

A new week of trading begins with the bulls pushing the SPX, Nasdaq adn RUT higher but the poor IBM results keep the Dow Industrials Index negative. The 8 MA remains above the 34 MA bullish markets for the hours ahead. The 8 MA is 1887-ish so the bears need the SPX to print below 1887 moving lower to curl the 8 MA downwards and create a negative 8/34 cross. Bears got nothing until the receive the negative 8/34 cross. The indicators on the 2-hour chart such as MACD line, histogram and stochastics are pointing to more upside for price. Price hints at a lot of sideways movement.The blue channel is in play with price back kissing the lower rail. The brown lines show a potential inverted H&S with head at 1820 and neck line at 1898 targeting 1976 if the 1898 gives way to the upside. There is a big fight ongoing for price between 1891 and 1908.Keystone's critically important SPX 12-month MA cross signal, the cliff, which tells you if markets are in a cyclical bull or cyclical bear is in play. The 12-month MA is 1895-ishsignaling a cyclical bear market for the months or more ahead but this could change in a heartbeat if the bulls can push higher.If the SPX overtakes 1895, then 1900 plus is coming quickly and the bulls will extend the relief rally for price to attack the 200-day MA at 1906 and 10-month MA at 1908. The 1895 level is a very big deal. It looks like price may want to poke up through and it would not be unreasonable to see a several-day fight between 1888-1908 since this is the key moving average cluster. The 50-week MA is 1891. The key S/R is 1928, 1924, 1910, 1897, 1889-1891, 1884, 1878, 1872-1874, 1848, 1841, 1828-1831 and 1808. Price is teasing the 1889-1891 area now. The 1891 would lead to a test of 1895 then 1897-1898.Keybot the Quant remains short and is tracking UTIL 559.53 and SPX 1895 as key market directional signals. Utilities explode higher creating bull juice in the stock market. If the SPX moves above 1895 a test of 1897-1898 is next and Keybot may flip long above 1898. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.Note Added 10:36 AM: The SPX HOD is 1894.73. The 12-month MA is 1894.69. Price overtook the 1891 resistance which is the 50-week MA at 1891 that now becomes support and price will want to back test. Theprice action is the same as Friday. The SPX is fighting at the 50-week and 12-month MA's. The 1895 is immensely importantand with price at 1892, the stock market is in a cyclical bear market for the weeks and months ahead.Bulls need three SPX points to reverse this dire forecast otherwise they will receive daily beatings going forward.Note Added 10:45 AM: Bulls are pushing hard attacking 1895 resistance again. Now above 1895 by a few pennies......... 1895.03 ... spank down .. 1894.51... the drama continues......Note Added 10:38 PM: The bulls slap the bears in the face today sending the SPX above the 12-month MA at 1895 and equities into a cyclical bull pattern. The rally gains steam due to the strength in utility stocks.Keybot the Quant flips long at SPX 1900. The SPX stops short of the 200-day MA at 1906 and 10-month MA at 1908. As mentioned over the last few days, these critical moving averages need back tested so it may as well be now. Since critical horizontal price resistance is at 1910, a strong resistance gauntlet is formed at 1906-1910.Bulls win big above 1910. Bears win big if the SPX remains under 1906. The 8 MA remains above the 34 MA for the 30-minute chart above signaling bullish markets for the hours ahead. The 30-minute chart shows a long and strong RSI and money flow so another higher high in price is desired. The SPX 1-hour and 2-hour charts show long and strong indicators with no real threat of negative divergence as yet so the SPX may float higher all through the Tuesday session (several hours forward). It appears the bulls have running room and would be expected to test the 1906-1910 resistance gauntlet. The charts hint at a push up through the gauntlet. Bears will receive help if retail stocks are weak tomorrow and more importantly from any negative news concerning global events, wars, Ebola, all that drama. If the world is quiet, the bulls should be able to run higher up through the 1906-1910 resistance gauntlet. The 1906-1910 battleground will decide the fate of both bulls and bears on Tuesday.

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Do not invest based on anything you view or read on this blog. This blog is for educational and entertainment purposes only. Consult your financial advisor before making any investment decision. Please read the Terms and Conditions.